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Official Tax Guide

Mississippi Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Mississippi state taxes. Income tax (4.7% (Flat)), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

Mississippi State Tax Guide 2025

Welcome to Mississippi! As you prepare for your move to the Magnolia State, understanding the tax landscape is crucial for financial planning. This guide provides an overview of Mississippi's tax structure for 2025, focusing on key areas affecting individuals and families.

Mississippi generally offers a lower tax burden compared to the national average, particularly in income and property taxes.

1. Income Tax

Mississippi has transitioned to a simplified tax structure that is favorable for many taxpayers.

  • Tax Rate: As of 2025, Mississippi utilizes a flat income tax rate of 4.7%.
  • Structure: This is a flat tax, meaning all taxable income is taxed at the same rate, regardless of income level. This replaced the previous progressive system with multiple brackets.
  • Standard Deduction: Mississippi allows for a standard deduction, which reduces your taxable income. For 2025, the standard deduction is generally $2,300 for single filers and $4,600 for married couples filing jointly. (Note: These figures are subject to inflation adjustments; verify current amounts before filing).
  • Who Must File: Residents with gross income exceeding the standard deduction plus any exemptions must file a Mississippi state tax return.

2. Sales Tax

Sales tax is a significant source of revenue for the state and local governments.

  • State Rate: The state sales tax rate is 7%.
  • Local Taxes: This state rate does not include local taxes. Cities and counties may levy additional sales taxes. Combined rates can typically range from 7% to 8% depending on the jurisdiction.
  • Groceries: Mississippi taxes groceries at a reduced rate of 7% (matching the general state rate but lower than the previous rate). Local taxes may still apply.
  • Exemptions: Prescription drugs are exempt from sales tax.

3. Property Tax

Mississippi property taxes are among the lowest in the United States.

  • Overview: Property taxes are administered at the local level by county assessors. Taxes are assessed on real property (land and buildings) and personal property (vehicles, business equipment).
  • Rates: Effective tax rates are generally low, often ranging between 0.5% and 1.0% of assessed value, depending on the county and municipality.
  • Homestead Exemption: Homeowners may qualify for a homestead exemption, which reduces the taxable value of their primary residence. This exemption is available to homeowners under age 65 or those who are disabled. For those 65 or older, the exemption can exempt the first $7,500 of assessed value from all ad valorem taxes (school taxes may still apply).

4. Other Taxes

  • Gasoline Tax: Mississippi’s excise tax on gasoline is relatively low compared to national averages. As of 2025, the state tax is approximately 18 cents per gallon. Federal taxes apply on top of this.
  • "Sin" Taxes: Mississippi imposes excise taxes on specific goods, including alcohol and tobacco products. These rates are subject to legislative changes.
  • Inheritance/Estate Tax: Mississippi does not levy an estate tax or inheritance tax on the beneficiaries of a deceased person's estate. This is a significant advantage for estate planning compared to some neighboring states.
  • Inventory Tax: Mississippi is one of the few states that taxes business inventory. However, a phase-out of this tax has been implemented; while it was fully phased out for certain taxpayers in prior years, business owners should verify the current status with a tax professional.

5. Retiree Taxes

Mississippi is considered a tax-friendly state for retirees.

  • Retirement Income: Most retirement income is exempt from Mississippi state income tax. This includes:
    • Social Security benefits.
    • Distributions from private and public pension plans (including military pensions).
    • Income from IRA and 401(k) accounts.
  • Income Thresholds: The exemption generally applies regardless of income level, making it highly attractive for retirees.
  • Sales Tax: While sales tax applies to purchases, Mississippi does not tax Social Security benefits, providing additional relief.

6. Comparison to Neighbors

Mississippi's tax structure generally offers a lower overall burden compared to its neighbors:

  • Louisiana: Louisiana has a progressive income tax with rates up to 6%, and higher sales taxes (state + local can exceed 10% in some areas).
  • Alabama: Alabama has a progressive income tax with rates up to 5%, but significantly lower property taxes. Sales tax rates are comparable but local rates can push totals higher.
  • Tennessee: Tennessee has no state income tax on wages (though it does tax investment income), but generally higher sales tax rates (state rate is 7%, plus local rates can total over 9%).
  • Arkansas: Arkansas has a progressive income tax (rates ranging from 2% to 5.5% in 2025) and a state sales tax of 6.5%.

Conclusion: Mississippi is often most favorable for retirees and those seeking low property taxes, though Tennessee offers the advantage of no wage income tax.

Disclaimer: Tax laws change frequently and can vary based on individual circumstances. The information provided in this guide is for general educational purposes only and is based on 2025 data where available. It is not a substitute for professional tax advice. Consult a CPA or tax professional regarding your specific financial situation before making relocation or tax decisions.